What’s the future for society lotteries?

Zeina Whalley joined the team in January 2013 as the new Policy and Research Trainee. Zeina’s work focussed on welfare reform and society lotteries. Zeina no longer works for NCVO but her posts have been archived on this site for reference.

The National Lottery is a significant source of funding for the voluntary sector, raising £30 billion for good causes to date. So too are society lotteries, which netted a total of £126 million for good causes in 2011/12. A society lottery is a local lottery run by a charity with the aim of raising money for a particular cause. They are subject to their own legislation and regulations- the key requirement being that they give at least 20% of returns to good causes. They’re also subject to limits on their annual proceeds and the size of prizes they can offer.

Why are we talking about them now?

At the end of last year the Department for Culture Media Sport (DCMS) announced they would be launching a consultation on society lotteries in 2013 and we’re expecting this in the next few weeks. The consultation will explore ways of ensuring that the lottery market delivers the maximum benefit to good causes. It’s likely to focus on whether there’s a case for changing the 20% minimum return to good causes.

Which option will scoop the jackpot for the sector?

Raising the minimum return to good causes

On the face of it, the more money going to good causes, the better! Raising the minimum percentage would seem the most obvious answer. The National Lottery already gives more than the society lottery minimum of 20% – giving an average of 28% to various good causes across all of their games. In fact research carried out by NERA in 2012 shows that 93% of society lotteries already surpass this threshold and donate more than 30% to benevolent causes with many giving 50% or more.

Lowering the minimum return to good causes

Lotteries can be expensive to run in the initial start-up period, so returning 20% of their proceeds to good causes can be a challenge for some organisations. Some argue that lowering the threshold could enable more organisations to launch a society lottery. If more lotteries are operating and raising funds for good causes, then the overall amount benefiting the sector could be greater too.

Keep it at 20%

Maybe then keeping the threshold at 20% is a happy medium? At present, this enables charitable organisations to set up society lotteries and return an acceptable proportion of their proceeds to good causes. The 20% threshold is only the floor- not the ceiling – so it allows lotteries the flexibility to give more if and when they are in the position to do so. This seems to be what most society lotteries have been doing to date and have raised a lot of money in doing so.

What do you think?

The DCMS consultation on society lotteries has been long-awaited and we’re expecting it to be launched any day now. There’s a real issue around how we can maximise the amount of money raised for good causes from society lotteries and whether increasing the 20% minimum is the answer. NCVO will be sending out a briefing paper and short questionnaire to members to find out what you think as soon as the consultation comes out. So do watch out for this- your thoughts and experiences on this issue are crucial and will inform NCVO’s response to DCMS. Or get in touch and let us know what you think now by emailing us directly at Zeina.whalley@ncvo-vol.org.uk

In the interests of full disclosure: NCVO has previously operated a society lottery and may do so again in the future.

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